Rapidly rising rents and stagnant incomes have made renting an expensive proposition across the country. Nationally, renters are spending more of their income on rent than they have at any point in the past 30 years.
At Zillow we measure affordability by looking at how much of a household’s monthly income is spent on rent (excluding utilities and other costs). Spending on rent is captured by the Zillow Rent Index, which tracks the monthly median rent in particular geographical regions. Historically in the United States, the median household would need to spend 24.9 percent of their income to afford the rent on the median property. Currently that number stands at 29.6 percent.
In other words, renters across the nation are currently spending almost 19 percent more of their incomes on rent than they did in the pre-bubble period between 1985 and 2000. In fact, in some parts of the country such as Los Angeles, Miami and San Francisco, the average household would need to spend over 40 percent of their income to rent the average home.
Nationally, the share of income that households must devote to rent has increased steadily and consistently since 2000, as the increase in rent has dramatically outpaced the growth in income over the same period. Over the period from 2000 to 2014, median household income has increased by 25.4 percent, while rents have increased over 52.8 percent, more than twice as much. On the heels of our recent analysis showing the erosion of affordability of homes for purchase, this represents even more bad news for those looking for housing. The interactive visual below shows how housing affordability in metros across the country has evolved over time, highlighting the steadily increasing unaffordability of rentals.
The general rule of thumb for households has been to try to keep housing costs, including utilities, to under 30 percent of their income after taxes. Rising rents have meant that in a number of places, rent alone will cost the average household more than 30 percent of their income, even before taxes and the cost of utilities and the like are included
*If the reference is unfamiliar, in 2005, 2009, and 2010, Jimmy McMillian ran for mayor or governor of New York as a member of the ‘Rent Is Too Damn High Party.’ Highlights from his debate performance in the 2010 gubernatorial debate can be seen here.